eSN Special Report: Rating the E-rate

By Dennis Pierce

May 30th, 2008

With so much money at stake, and a byzantine application process, the E-rate is the source of nightmares for many participants. Yet, despite the program’s complexity, three out of four applicants say the E-rate is meeting its goal of connecting schools and libraries to the internet, according to a comprehensive new survey–and many applicants say they couldn’t do without it.

Conducted by eSchool News and E-rate consulting firm Funds For Learning LLC, the survey polled more than 700 E-rate applicants on a wide range of questions about the program.

eSN Special Report: Rating the E-rate

By Dennis Pierce

May 30th, 2008

Bonnie Tollefson, director of the Levi County, Fla., Public Library System, knows the trials and tribulations of applying for federal E-rate discounts all too well.

"My predecessor was filing at the deadline, and the system went down," Tollefson said. "When he checked again a week later, the application was in [the system] but not certified." The former Levi County library director tried certifying his application at that time–but because the program’s filing window already had closed, the thousands of dollars in telecommunications discounts he had requested through the program were denied.

Said Tollefson: "He was forced into retirement because of this very expensive error. Is it any wonder I get extremely anxious just talking about the E-rate?"

Tollefson’s anxiety isn’t unique. With so much money at stake, and a byzantine application process, the E-rate is the source of nightmares for many participants. Yet, despite the program’s complexity, three out of four applicants say the E-rate is meeting its goal of connecting schools and libraries to the internet, according to a comprehensive new survey–and many applicants say they couldn’t do without it.

Conducted by eSchool News and E-rate consulting firm Funds For Learning LLC, the survey polled more than 700 E-rate applicants on a wide range of questions about the program.

The survey responses, which come a full decade into the E-rate’s existence, provide the most complete picture yet of who the typical E-rate manager is, how much time applicants invest in the program, their attitudes and opinions about various aspects of the E-rate process, the key challenges that participants face in applying–and their ideas for how to improve the E-rate.

Although 77 percent of respondents said the E-rate is meeting its goal, fewer than half (46 percent) said the program is well managed. Common complaints included too much paperwork, an inconvenient timeframe for applying, and inconsistent support from the Schools and Libraries Division of the Universal Service Administrative Co. (USAC), the agency that administers the E-rate.

"The constantly moving deadlines for paperwork are a problem," wrote one survey respondent. "It would seem these dates are annual and could be set, rather than changing from year to year and even from month to month."

"The types of documentation and wording accepted by the reviewers is not uniform, no matter what the presenters say at the annual E-rate training sessions," wrote another. "Documentation and descriptions that have not been problematic in previous years … may not be accepted by some reviewers in any given year. Frequently, the documentation required isn’t even reasonable. Applicants should not have to dumpster-dive to find packing labels to prove a building is a school."

We asked applicants to rank their level of familiarity with various parts of the E-rate process on a scale of 1 to 5, with 5 being "most familiar." Interestingly, there was little variation among the average responses, which all fell in the range of 3.2 to 3.8–with one glaring exception: The rules governing deadline extensions and service substitutions garnered an average score of 2.6. This suggests that USAC should consider focusing more training and outreach on this aspect of the program.

Not surprisingly, the more time applicants invested in the E-rate and the more years of experience they had, the more familiar they were with the program overall. But applicants who have experienced an audit (4.0), site visit (4.2), or HATS (Helping Applicants To Succeed) instruction (4.3) also considered themselves more familiar with the E-rate than those who’ve experienced none of these interventions (3.2).

"This should encourage USAC to keep doing these activities–especially the HATS visits," said John Harrington, Funds For Learning’s chief executive.

There were few statistically significant differences between how small and large applicants responded to the survey questions. But there were key differences between how low- and high-discount applicants answered.

For instance, while 89 percent of high-discount applicants (those who qualify for discounts of at least 80 percent) said the E-rate is meeting its goal, only 64 percent of low-discount applicants (those who qualify for discounts under 50 percent) said the same thing. And while 54 percent of high-discount applicants said the program is well managed, just 34 percent of low-discount applicants–in other words, those who qualify for less funding–think so.

One area where there was a slight difference in the responses of small and large applicants was whether they use the money saved through the E-rate to buy other technology products or services. Fifty-six percent of large applicants (those serving at least 15,000 students) said yes, compared with 46 percent of small applicants (those serving fewer than 5,000 students). On average, 49 percent of applicants use the money they save through the E-rate to purchase additional technology.

Despite the E-rate’s many challenges, several applicants said the program is improving–and decisions such as the Bishop Perry Order certainly have helped. This FCC directive requires USAC to be less rigid and more user-friendly in how it processes applications, and 72 percent of applicants said it has had a positive affect on the program.

Less certain, however, has been the impact of the Two-in-Five Rule, which USAC created to allow more applicants to receive discounts for internal connections. The rule states that applicants cannot apply for discounts on these Priority 2 services more than twice in any given five-year period. Yet 52 percent of applicants said this new rule has had no effect, or they weren’t sure of its impact. The other half of respondents were about evenly split between those who said it has been a positive development and those who disagreed.

"Statistically speaking, the Two-in-Five Rule hasn’t helped," said Harrington. "What’s more, it adds a whole new layer of complexity, which actually slows down the funding process."

The No. 1 complaint expressed by survey respondents was the amount of paperwork the E-rate requires, which many applicants find overwhelming.

"I can’t afford an assistant administrator, and my biggest worry is how to get someone trained to [manage] the E-rate when I retire," wrote one respondent. "It is one of the most complicated programs I have ever seen, and it keeps changing all the time." Said another: "The learning curve is way too steep. It shouldn’t be; it places the disadvantaged at an even greater disadvantage."

Applicants would like to see the E-rate process simplified for those who are requesting discounts only on Priority 1 services (telecommunications services and internet access) and for smaller schools and libraries.

"We receive only $3,000 per year, and yet we have to jump through all the [same] hoops [as] the bigger schools," one applicant said. "Perhaps [USAC could implement] something like the IRS system, and have a Form 470EZ."

Many applicants also questioned why they must reapply for the same services each year, or supply the same information to reviewers over and over again.

"If nothing really changes from year to year, why can’t we just check a box that says the same as last year for all forms and be done with it?" one respondent asked.

That’s not the only example of redundancy that applicants cited.

"Everyone in the client services bureau needs to be able to access the information that you supply, instead of repeatedly asking for the same information as your application goes through each level of review," another said. "You get asked the same questions during initial review, final review, and even selective review–and you have to supply the same information and paperwork each time. … To me, that is not a good use of my time or the time of the reviewer."

Among the many other suggestions for improvement, one respondent said she thinks USAC’s web site should allow program participants to track the status of their application, and another said the rules about whether products or services are eligible should be relaxed. For example, "restrictions on how internet access is used outside of school inhibits the rollout of one-to-one initiatives," she said.

The challenges of applying for E-rate discounts aside, more than half of survey respondents said they would be unable to sustain their current level of connectivity without the program.

"Our system would not be able to survive were it not for the E-rate," one applicant concluded.